October 4, 1999
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Gemstar Will Buy TV Guide
For $8.36 Billion Plus Debt
An INTERACTIVE JOURNAL News Roundup
PASADENA, Calif. -- Gemstar International Group Ltd. agreed to acquire TV Guide Inc. for an indicated value of $8.36 billion in stock.
Gemstar, which develops products for simplify the viewing and recording of video and television programming, including VCR Plus, said it will exchange 0.6573 of its common shares for each of TV Guide's Class A and Class B common shares. Based on Gemstar's closing price Friday, the deal values each share of TV Guide at $54.97, a 32% premium on TV Guide's closing price Friday.
Under terms of the deal, Gemstar will also assume $600 million of TV Guide's debt. Following the transaction, TV Guide's shareholders will hold about 45% of the combined company's outstanding common shares.
The combined company will have annual revenue of about $1.5 billion.
In March, News Corp. completed its sale of TV Guide magazine for stock plus $800 million in cash to United Video Satellite Group, a Tulsa company controlled by the former Tele-Communications Inc., the cable giant that is now part of AT&T Corp. That led to United Video's changing its name to TV Guide Inc. Both News Corp. and affiliates of TCI retained equal voting stakes in TV Guide Inc.
Gemstar's board will expand to 12 members and six of TV Guide's directors will join Gemstar's board.
Henry Yuen, who entered a voting agreement with two major TV Guide shareholders, will serve as chairman of Gemstar's board and will remain chief executive of the company.
"We are extremely excited about the prospects of the combined company," said Mr. Yuen. "Most importantly, TV Guide's experience and relationship with program-related advertiser customers will greatly enhance the combined company's vision of creating a rapidly growing advertising and transaction business based on its highly used electronic-program-guide platforms."
Following the Gemstar and TV Guide merger, the company will be renamed TV Guide International Inc.
Gemstar's Elsie Leung will remain chief financial officer and will serve as co-president and chief operating officer, in charge of operations traditionally under Gemstar.
TV Guide's Joachim Kiener and Peter C. Boylan will serve as co-presidents and chief operating officers in charge of certain TV Guide businesses.
Ms. Leung and Mssrs. Kiener and Boylan will join the newly formed office of the chief executive under Mr. Yuen and will serve as chairman and chief executive of their respective divisions.
Stephen A. Weiswasser will continue as general counsel and executive vice president. Gemstar said voting agreements have been entered into by the principal shareholders of each company to vote in favor of the merger, which is expected to close in the second half of 2000.
The transaction is subject to "very limited conditions," including shareholder approval and satisfaction of regulatory requirements. |
